Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
Session Chair: Shahram Amini, University of Denver
Location:Room "Connect"
Presentations
The Mitigation of Reputational Risk via Responsive CSR: Evidence from Securities Class Action Lawsuits
Douglas Cook2, Daewoung Choi1, Tony Via3, Weiwei Zhang4
1Louisiana State University, Shreveport; 2University of Alabama; 3Kent State University; 4James Madison University
Discussant: Santanu Kundu (University of Mannheim)
We examine the strategic production of CSR as a post-shock damage control instrument (responsive CSR). We proxy for the negative shock using securities class action lawsuits (SCAs) and find that net CSR increases 53% after a filing. We create a hand-collected dataset that reveals lawsuit firms strategically place news releases to blunt short-term effects from negative news related to the litigation process. Moreover, firms use responsive CSR synergistically with advertising for short-term effect. We find that responsive CSR mostly represents window dressing – it does not add long-term firm value and is associated with board members who have significant reputational concerns.
CEO Personal Reputation and Financial Misconduct
Chen Yang1, Zicheng Lei2, Dimitris Petmezas1, P. Raghavendra Rau3
1Durham University, United Kingdom; 2King's College London, United Kingdom; 3University of Cambridge, United Kingdom
Discussant: Felix von Meyerinck (University of Zurich)
We examine the effect of CEO personal reputational capital on financial misconduct. We find that Home CEOs (defined as those who manage firms located within 100 miles of their birthplaces) are associated with significantly less misconduct than firms with non-home CEOs. However, home CEOs also appear to rationally calculate the effect of corporate events on personal reputation. When their firms are financially distressed, home CEOs do not act differently from non-home CEOs in the levels of firm misconduct at their firms, perhaps because the catastrophic reputational damage of bankruptcy is higher than the reputational costs of engaging in financial misconduct.